What is a Comparative Market Analysis?

A CMA contains information about how much is being asked for homes on the market, prices of homes currently under contract but not sold yet, homes that have recently sold, and expired listings. All of the homes in a CMA should be reasonably close to the size, age, condition, amenities, upgrades, and location of your home. This information is then used to determine how much your home is likely to sell for in the current market. To get the best price in the current market, you should have a comparative market analysis (CMA) done on your home. Real estate agents often offer CMAs as part of their services, usually for free. A CMA contains information about how much is being asked for homes on the market, prices of homes currently under contract but not sold yet, homes that have recently sold, and expired listings. All of the homes in a CMA should be reasonably close to the size, age, condition, amenities, upgrades, and location of your home. This information is then used to determine how much your home is likely to sell for in the current market.
Beware of recent inflated home prices affecting your expectations of what your home should sell for today. 2005 prices are not the prices of 2009 and 2010. In a market where prices can fluctuate based on seemingly unrelated events, it is inadvisable to use your purchase price to determine your selling price. In today’s “buyer’s market”, overpricing only means that people will ignore your home for something more reasonably priced. What you paid for your home means nothing in a buyer’s market; all people care about is how much homes are selling for now. If you really need or want to sell, you may be facing a significant loss. Accepting the possibility (or reality) of this will make it easier to sell your home for the best price possible. Getting a CMA done will give you and your agent a price that will likely be considered seriously by buyers.
Analyses can differ depending on a number of factors. The number of comparable homes currently on the market can be a lot different than the number of similar properties available a month ago. CMAs can also differ depending on the different characteristics of the homes compared. If you’re selling a 2 bedroom rancher with a 30 year old roof, likely it won’t go for as much as a 2 bedroom rancher with a 5 year old roof. If your home is exquisitely maintained, it will likely go for more than a comparable home that was advertised as a “fixer-upper”. Any upgrades or amenities that your home has should be included in the evaluation.
An analysis of your home is highly recommended if you want to sell your home for the very best price you can get for it. A CMA will help you and your agent evaluate your home and show you what homes like it are being priced for and what they’re selling for. Allowing for differences between homes and the markets, you should end up with an idea of what your home is presently worth.